Chennai: Hinduja Group flagship Ashok Leyland and
Nissan Motor Co., Ltd., today signed a binding master co-operation agreement (MCA)
for the formation of three joint venture companies to enter the light commercial
vehicles segment in India.

The agreement was signed in Chennai today by R.
Seshasayee, managing director of Ashok Leyland and Carlos Ghosn, president and
CEO of Nissan Motor Co., Ltd.

This agreement follows the signing of the
heads of agreement (HoA) document in August and reflects progress achieved with
the detailed project evaluation. The partnership will include the development
and manufacture of LCV products under both the Ashok Leyland and Nissan brands
as well as cooperation in sales.

"The LCV business is one of Nissan''s
most important global growth engines," said Carlos Ghosn, president and CEO,
Nissan."This agreement accelerates our LCV business in India and lays the
foundation for further growth through exports. Ashok Leyland shares our vision
of a successful win-win partnership, where both companies are focused on value
generation for all stakeholders. We see India emerging as an important hub in
Nissan''s global LCV manufacturing footprint."

The two companies say
the projects would require an investment of around $500 million for the creation
of three joint venture companies in the following three automotive businesses:

A
vehicle manufacturing company to manufacture LCVs in India for the two companies,
which would be owned 51 per cent by Ashok Leyland and 49 per cent by Nissan. Production
will start in 2010 and will include the new generation Nissan Atlas F24 light-duty
truck, in addition to a range of products covering applications from 2.5 to 8
ton gross vehicle weight (GVW). In the medium term, production volume, intended
for both Indian and export markets, is expected to grow beyond 100,000 units annually.

"With the launch of our first product in 2010 we will be able to participate
in the growth of the Indian LCV market with reliable and innovative vehicles that
will match the expanding need for transportation of light cargo in small to medium
distances," said Andy Palmer, corporate vice president, Nissan. "We
are now focused on selecting the best production site to ensure the optimum mix
of efficiency of operations, logistics and quality of the output."

The
second pertains to a powertrain manufacturing company responsible for the manufacture
and assembly of engines and other drivetrain components that would be fitted in
LCV products and for export. The shareholding in this company will be 51 per cent
by Nissan and 49 per cent by Ashok Leyland.

And, finally, a technology
development company, with equal share holding by the two partners responsible
for the development of LCV products and related powertrains, destined for the
Indian and select global markets. The products developed by this company will
be sold under both the Ashok Leyland and Nissan brands.

"The Hinduja
Group is firmly committed to the expansion of its automotive business globally,"
said Gopichand P Hinduja, president, Hinduja Group of Companies."Nissan,
under the leadership of Mr. Carlos Ghosn, has shown exemplary vision in using
partnerships for growth. With this partnership I am confident that Ashok Leyland''s
growth plans in the LCV business will be realised."

The two partners
also expect to cooperate to leverage each other''s dealer networks in specific
global markets. For example, this could provide Nissan with access to Ashok Leyland''s
dealers in India and for Ashok Leyland, access to Nissan dealer networks in specific
export markets.

The JV is also set to benefit from leveraging the sourcing
strengths of both the partners.

Dheeraj G Hinduja, co-chairman, said, "We
hope to leverage Ashok Leyland''s marketing insight, product development capabilities
and dealer network, together with the excellent engineering foundations inherent
in Nissan''s global products. The products will set new benchmarks in technology
and customer value."

According to R Seshasayee, managing director,
Ashok Leyland, "An effective entry into the LCV segment has been on Ashok
Leyland''s radar for some time now. This partnership with Nissan will allow both
companies to develop a range of cost-competitive and customer-oriented LCVs targeted
not only to the Indian market but several select markets overseas. We are confident
that the JV structures will facilitate both companies to achieve this objective
with equitable contributions."

The Hinduja Group is a multi-billion
dollar global investment and banking group with a diversified global portfolio
of holdings across the manufacturing services and banking sectors. The Group,
founded by P D Hinduja in 1914, has activities across three core areas of investment
banking, international trading and global investments. As part of its global investments,
the Group owns businesses in automotive, information technology, media, entertainment
and communications, banking and finance, infrastructure project development, chemicals
and agri business, energy, real estate and healthcare.

Ashok Leyland is
the flagship of the Hinduja Group and a leading manufacturer of commercial vehicles
in India with 06-07 sales turnover of more than $2 billion. With six manufacturing
locations at Chennai, three plants at Hosur, Alwar and Bhandara, the company has
an annual production capacity of 84,000 vehicles which is being enhanced to 100,000
in the current year. Ashok Leyland has associate companies in the Czech Republic
and the UAE and joint ventures in Sri Lanka and Bangladesh, and also exports to
over 20 countries worldwide.

Nissan Motor Company generated global net
revenues of 10.468 trillion yen in 2006. Nissan is present in all major global
auto markets selling a comprehensive range of cars, pickup trucks, SUVs and light
commercial vehicles under the Nissan and Infiniti brands. Nissan employs over
180,000 people worldwide.

Under
the Nissan Value-Up business plan, the company continues to focus on long-term
sustainable and profitable growth driven by three commitments:

To maintain
top level of operating profit margin among global automakers

To achieve
global sales of 4.2 million units in 2009

20 per cent return on invested
capital on average over the course of the plan

In 2007, Nissan will
introduce 11 all-new products globally, with a further 33 to be introduced during
the following three years.